What is the best way to ask angel investors for money?

Sonja Hoel Perkins / May, 2018

Description

Sonja Hoel Perkins, Founder of Broadway Angels explains that angel investors are looking for reasons to invest, so don’t be afraid of asking for money if you are the one solving a problem that no one else is.

Video transcript:

What is the best way to ask angel investors for money?

Everybody has a hard time asking for money right. I think the best way to ask for money is to be really passionate about your idea. Because it’s one of those things where if you can’t get out of the bed in the morning without solving this problem because it is such a big problem. That passion is going to come out and other people will see it.

When an entrepreneur is really passionate about their market, about their product, about the potential, when they say ‘Gosh, there is nobody solving this problem and I’m the one to do it’. That is probably the easiest way to ask for money because you have to, it’s your passion, it’s your life.

Angels fund the very early stage companies. Most venture capitalists won’t invest in an early stage angel round for a couple of reasons. One is that they just don’t have enough of the data or enough time and the other reason is that the amount of money that is being raised is so small.

The angels are left with the opportunity to fund people that really have nothing other than an idea and the passion. What I do when I’m looking at investing is that I really spend a lot of time with the entrepreneur and the founder. I have to believe as much as they believe in the product. I have to believe that there’s a market need and that there is a problem. I’m really looking for reasons to invest versus not to invest.

In the early days of search engines. Many venture capitalists turned down Google because they thought why would you invest in Google because there have already been so many search engines, this is a crazy deal because they are so late in getting into this market.

Many angels invested in Google, same with Facebook, Whatsapp, and all these early-stage companies you literally would never have heard of without angel investors. They were looking for reasons to do this, for example with Google, what if it is the best search engine in the world, what if these searches are so much better, what could happen? Obviously, we all know what happened with Google.